MediaTek accused of setting 'patent troll' on rival, says it will defend itself

RealTek alleges MediaTek was paying Future Link a 'secret bounty' to file 'meritless' patent cases in US courts

Taiwanese chip designer MediaTek is preparing to defend itself against a legal case in the US that claims it "conspired" with a patent litigation biz to file meritless lawsuits against a rival, in order to disrupt its business operations.

MediaTek, a fabless chip company that targets networking, smartphones and other applications, has informed the Taiwan stock exchange about the case and said it intends to defend itself against the accusations, according to a statement it made to Reuters.

The complaint in question [PDF] was brought by Realtek, another Taiwan-based fabless semiconductor outfit with a similar portfolio. In its court filing, Realtek alleges that a patent assertion entity – which the lawsuit characterizes as a "patent troll" – was engaged in what it said is a conspiracy with MediaTek to file "countless frivolous lawsuits" that it claims are "meritless" against it involving invalid patents.

The complaint claims:

With this action, Realtek seeks to stop a modern robber baron and its hired henchmen, protect itself from ongoing injury, and guard against the destruction of competition in the critical semiconductor industry by holding defendants accountable for their conspiracy.

Realtek names Future Link Systems, LLC as the patent assertion company in question, but is also suing Future Link's parent company, IPValue Management, as part of the same case.

If the name IPValue Management sounds familiar, this could be because the company acquired nearly 5,000 patents from chip giant Intel last year, transferring these to another of its subsidiaries, Tahoe Research Limited, for the purposes of licensing them to technology companies.

Realtek alleges that MediaTek was paying Future Link a "secret bounty" to file "meritless" patent litigation cases in the US courts, in order to harass Realtek and divert resources away from its product development efforts.

In its court filing, Realtek claims this clandestine agreement was revealed during the discovery process relating to one of the cases. This showed that before the litigation against Realtek began, a license agreement among MediaTek, IPValue, and Future Link included a litigation "bounty" provision that had previously been hidden from public attention.

Once this agreement came to light, Future Link quickly dismissed all of its patent claims against Realtek, the company alleges.

But the cases were meritless anyway, according to Realtek, which alleged in the complaint there were multiple fatal defects in the filings – in one case, the complaint was not properly served, it claims – and that Future Link was unable to plausibly allege that Realtek engaged in any act of direct infringement.

At least one of these patent cases appears to center on the Arm-based processors that are integral to many of Realtek's TV Chip products. Future Link is said to have alleged that virtually every Realtek product with a multi-core ARM processor, the Advanced Microcontroller Bus Architecture (AMBA) and using the AXI bus protocol was infringing on its patents.

In doing this, the company was seeking to block Realtek from selling its TV Chips and essentially shutting it out of the market, Realtek claims, further alleging in the document this was "presumably at the behest of MediaTek."

Realtek said it is seeking compensation for damages it claims it suffered as a result of these actions to compensate for lost sales, but also for "costs of repairing relationships with current and potential customers."

Neither MediaTek nor IPValue Management were immediately available for comment. ®